Editor’s Note: The following essay is part one in a series of three that will explore the implications of different types of values for the kind of economy we seek to build.
Older readers might remember Father Guido Sarducci. Father Guido was a character created and portrayed by the comedian Don Novello, and was a recurring character on Saturday Night Live in the late 70s and in the 80s.
One of Father Guido’s classic sketches involved his idea for developing the “five-minute university.” The idea was that in five minutes, and for 20 bucks, Father Guido could teach you everything that the average college graduate remembers, five years after graduation.
So, for example, if you wanted to study Spanish, Father Guido would teach you to say “Como esta usted?” (How are you?), and the reply: “Muy bien” (Very well). According to his theory, that was the equivalent of two years of college Spanish.
You could study economics in the five-minute university, and Father Guido believed that the only thing you needed to know about economics was this: supply and demand. The business course was similarly to the point: buy something and sell it for more.
Seeing Father Guido’s five-minute university sketch sometime during the 80s was literally the full extent of my formal economics training when my wife and I started our farm business in 2007.
Buy something. Sell it for more. It sounds simple enough. But how do you get people to pay more for something that they can obviously get for less?
You add value.
But what do we mean by value? And how does it relate, if it does, to our values?
Value is generally understood to be an expression of what something is worth. The Latin root valere (to be strong, to be worth) is also the root of valiant and valour. In this context the word shares a sense of moral strength which gives us the sense of “values” or principles.
In neoclassical economics, value is defined as worth measured in money. But there are other definitions of value and the one I want to talk about is what the philosopher John McMurtry has described as “life values.”
John McMurtry is University Professor Emeritus of Philosophy at the University of Guelph in Ontario. He has made value theory, or axiology, the centre of his life’s work, and in the last decade has “focused his research on the value structure of economic theory and its consequences for global civil and environmental life.” He was invited by the Secretariat of UNESCO/Encyclopedia of Life Support Systems to author and edit a multi-volume study of world philosophy entitled Philosophy and World Problems.
The central title study of the work, “What is Good, What is Bad? The Value of All Values Across Time, Place, and Theories,” is an ambitious critique of the failure of not only economic theory, but the entire history of the world’s major thought-systems “to provide any coherently adequate ground of worth.” McMurtry writes in the summary:
Values, what is of worth or not, and why, define the human species across differences, domains and ways of life. They construct the meaning of life. The world crisis of life support systems which humanity now faces is explained as a predictable consequence of the long failure of theory and policy to ground in values which enable human life and life conditions—even as the air, soil and water degrade, climates and oceans destabilize, a rising half of the world is destitute, public sectors and services are privatized for profit, and species become extinct at a spasm rate… In contrast to known values and value-systems, an underlying “value of all values” is systematically explained and reconnected to lived values and life support systems as the lost life-ground of all human values through place and time.
As a very basic explication of his theory, McMurtry describes two master principles of value gain:
- The money code of value
- The life code of value
While they have been often confused, it is not an exaggeration to say that the future of civilization depends on distinguishing between them in our decision-making.
The money code of value represents a system of values that prioritizes profit over everything else. The practice of sustainability in the context of this value-system will always be constrained by, and forced to adapt to, the needs of the global economy.
The life code of value, as its name suggests, has different priorities. It is McMurtry’s “value of all values,” and it is life value that must guide any meaningful discussion of the sustainability of human institutions and civilization itself.
The goal of sustainability is defined by the OED as “the state of being or doing well in life; a happy, healthy or prosperous condition; the moral or physical welfare (of a person or community).”
Erich Fromm in The Art of Loving proposes that the idea of well-being speaks to the realization of human potential; the goal being to provide the opportunity for the maximum number of people to reach their full potential, rather than relegating them to the role of being merely consumers in the global marketplace.
Another way of thinking about the difference between the money and the life code of value is to borrow an idea from Kantian ethics.
The money code of value treats humans as a means to the end of increasing profits for share-holders. The life code of value treats money as a means to the end of improving everyone’s opportunity to reach their full human potential.
According to Kant it is never permissible to treat humans as a means to an end. The role of business, according to the life code of value, is to figure out how to transform money from an end in itself to a tool for shaping the world we want to live in.
A business of this kind would seek opportunities to add life-value to its products, and by so doing add value to the life of everyone involved in the production and consumption of that product all along the value chain.
The tension between the money code of value and the life code of value has always been present in culture. It is a dynamic that is currently playing out dramatically in the U.S. federal election process. What is at stake in this nomination is a debate over fundamental civic values, and the distinction between the life and money-code systems of value has never been as glaringly apparent as it is in the rhetoric of the campaigns that have coalesced around the two “anti-establishment” candidates of Bernie Sanders and Donald Trump.
If you have followed the campaigns at all you may have noticed that Sanders’ supporters are often accused of “not understanding economics,” because, by and large, they espouse principles that are consistent with the life code of value, which has not historically played any role in neoclassical economic thinking.
The criticisms of Sanders’ campaign are often textbook examples of TINA thinking, TINA standing for “there is no alternative,” a phrase made famous by Margaret Thatcher’s vision of economic determinism in the 1980s.
Trump on the other hand is the poster boy for the money code of value, and the promise he extends to his supporters is that they too will benefit in a system where there can by definition be very few winners and must be many, many “losers.”
I have noticed something very powerful about making a commitment to life value in business, about making your business an extension of your values, and not feeling you have to conform to some neoclassical abstraction of what a business is supposed to be. Life value has a way of building momentum, and small choices can end up having big impacts.
In my family’s business we add value to meat. We raise and market grass-fed beef, pork, and chicken, and we do it in as sustainable and humane a way as we possibly can. My customers value meat that is free from hormones, antibiotics, and genetically-modified organisms. They value a reduced carbon footprint, meat that is higher in conjugated linoleic acid and Omega-three fatty acids, with better flavour and texture. They value a farm ecosystem that results in cleaner water and air, healthy soil, and that provides space for birds and bees and other wildlife.
Two years ago we were raising three hundred chickens on pasture and this enterprise was largely a supplement to our beef production, which we were selling at farmers markets. We were approached by The Big Carrot, the largest co-operative organic grocery store in Toronto (there’s a life-value word: co-operative) because one of their customers told them they needed to be carrying our product. The Big Carrot supported us in growing this aspect of our production, and this year we will be raising six thousand chickens on pasture which makes us, to the best of my knowledge, the largest producer of 100% pasture-raised chicken in Ontario.
Monetary valuation must reduce everything to a dollar figure. The only logic of profit is cheaper is better. The logic of life value allows for creativity, for a discussion of what something is worth in the context of everything we consider to have worth, in the largest sense.
I plan to explore this distinction between the money-code of value and the life-code of value in depth over the next two weeks. Next week I will explore the failure of the money-code of value and the global free market to account for human values in any meaningful sense. The week after, I will outline some aspects of an emerging approach to valuation that provides an alternative to conventional economic thinking and attempts to properly account for “lived values and life-systems.”
The idea that we could actually achieve a global economy rooted in life value may seem impossible, but as the farmer poet Wendell Berry has written, “To reach for the impossible is to expand the limits of what is possible.”
In the meantime if there’s one thing I hope you remember about business and economics five years after reading these articles, it’s this: buy something. Add life value. Sell it for more.